Super Micro stock (NASDAQ:SMCI) was on a roll in early 2025, driven by booming demand for artificial intelligence (AI) infrastructure and strong ties to chipmaker Nvidia (NASDAQ:NVDA). But its recent fourth-quarter earnings miss has cast a shadow over its rally, sending shares down more than 18% in a single session. With analysts now sharply divided — some calling for $70 per share, others warning of a fall to $15 — investors are left asking: is Super Micro stock a hidden gem or a falling knife?
SMCI Stock: AI Darling Hits a Rough Patch
For much of 2025, Super Micro stock looked like a top play on the AI boom. The company specializes in high-performance, energy-efficient servers essential to AI workloads, cloud computing, and data centers. With a global presence and close collaboration with Nvidia, SMCI had regained investor confidence after past concerns about accounting issues and Nasdaq delisting threats.
By February, the stock had surged to a 2025 high of $66.44, representing a massive comeback. Even after its recent drop, Super Micro stock is still up 50% year-to-date, far outperforming the S&P 500 Index (INDEXSP: .INX), which has gained just 8.5%.
But the momentum didn’t last. The company’s fiscal Q4 results released on August 5 triggered a sharp selloff. The numbers weren’t disastrous — revenue grew 7.4% year-over-year to $5.8 billion — but they still missed the $5.9 billion consensus. Adjusted earnings per share came in at $0.41, well below expectations of $0.44 and down 24% from last year.
Why the Disappointment Stung
The earnings miss was especially painful because of high investor expectations. The AI wave has been lifting many tech stocks, and SMCI was viewed as a prime beneficiary. But rising costs, thinner margins, and delayed customer purchases caused by upcoming Nvidia chip launches dampened the mood.
Gross margin fell to 9.5% from 10.2%, suggesting Super Micro is struggling to maintain profitability amid heightened competition and input costs. The company also cited the impact of tariffs introduced by former President Donald Trump, which raised import costs and further squeezed margins.
To make matters worse, guidance for the next quarter also disappointed. Management forecast revenue between $6 billion and $7 billion, versus analyst expectations of $6.6 billion. EPS guidance of $0.40 to $0.52 also fell short of the expected $0.59.
Analyst Ratings Are All Over the Map
After the earnings miss, Wall Street’s response was mixed. JPMorgan’s Samik Chatterjee lowered his price target to $45 while maintaining a “Neutral” rating, citing capital limitations and customer hesitation.
Meanwhile, Bank of America’s Ruplu Bhattacharya actually raised his price target slightly — from $35 to $37 — but kept an “Underperform” rating, citing inventory risks and weak near-term demand.
In total, 16 analysts cover Super Micro stock. Only four call it a “Strong Buy,” while six rate it a “Hold.” Three analysts are moderately bullish, but three others — including two “Strong Sell” calls — suggest more pain could be ahead.
Can Super Micro Stock Bounce Back?
Despite near-term headwinds, the long-term outlook for Super Micro stock remains intriguing. Analysts project the company’s earnings to grow 19.2% year-over-year in fiscal 2026 and another 21% in 2027. If the AI infrastructure boom continues and SMCI can stabilize its margins, the company could reassert its leadership in the space.
But the wide range of price targets — from $15 to $70 — underscores the high level of uncertainty. The bullish case sees 54% upside from current levels, while the bearish scenario suggests a potential 67% decline.
Final Thoughts
Super Micro stock finds itself at a crossroads. Its leadership in AI hardware and global reach make it an attractive long-term growth story. Yet the recent earnings miss, margin pressure, and mixed analyst sentiment have created significant short-term risk.
Investors should tread carefully. For risk-tolerant investors betting on the AI trend, the current dip may offer a buying opportunity. But for others, it may be best to wait for clearer signs of margin recovery and demand stabilization.
As always, do your own due diligence — because when price targets range from $15 to $70, anything can happen.
Featured Image: Freepik
Author Stephanie Bédard-Châteauneuf 
